India imposes 40% export duty on onions from May 4

After extending the ban on onion exports indefinitely from April 1, the government on Friday imposed 40 per cent export duty with effect from May 4.

In a notification issued by the Finance Ministry, the onion export duty has been levied at 40 per cent. Experts said that since there is an export ban, this duty will apply to shipments allowed on diplomatic grounds.

On August 19 last year, the government slapped a 40 per cent export duty, which was brought down to zero on October 28, 2023, after the government imposed a minimum export price of $800/tonne. However, as shipments of onion could not be prohibited as desired amid an increase in domestic prices, the government had slapped a complete prohibition with effect from December 8, 2023, subject to quantities allowed on request of foreign countries on a case-to-case basis.

As the export ban was to expire on March 31, the commerce ministry issued a notification on March 22, extending the prohibition “until further orders”.

Last week, the government announced export permits worth 99,150 tonnes of onion to six countries — Bangladesh, Bhutan, Sri Lanka, UAE, Bahrain and Mauritius, close after allowing 2,000 tonnes of white onion from Gujarat.

National Cooperative Exports Limited (NCEL) has been appointed the nodal agency for export of all prohibited agri produce including onion, sugar and rice.

In separate orders last month, the government allowed the export of up to 2,000 tonnes of white onion to the Middle East and some European countries via three specified ports on the west coast after being certified by the Gujarat government. It also had allowed 20,000 tonnes to the UAE and 10,000 tonnes to Sri Lanka. The total quantity of onion permitted for export, so far in the 2024-25 fiscal year exceeds 1.30 lakh tonnes (lt).

The Consumer Affairs Ministry, in a statement on April 27, said that NCEL has been sourcing the domestic onions to be exported through the e-platform at L1 prices and supplied to the agency or agencies nominated by the government of the destination country at the negotiated rate on a 100 per cent advance payment basis.

The ministry also said that the procurement target for the onion buffer out of the Rabi 2024 season under the Price Stabilisation Fund (PSF) of the Department of Consumer Affairs has been fixed at 5 lt this year. Central agencies such as NCCF and NAFED are tying up local agencies such as FPOs/FPCs/PACs to support the procurement, storage, and farmer registration to begin the procurement of any store-worthy onion, the government said.

The Rabi onion production is set to dip to 193 lt in 2023-24 (July-June) as against 236 lt year-ago, a fall of 18 per cent. Rabi onion is critical for the country’s onion availability as it contributes 72 -75 per cent of annual production. The Rabi crop is also crucial for ensuring year-round availability of onion as it has a better shelf life compared to Kharif onion and can be stored for supplies till November- December.